Written by Andrew Gibson, Head of Cushman & Wakefield’s Capital Markets Team in Cardiff
The surge in office take-up which has been experienced in recent years has significantly slowed as a result of a lack of Grade A office availability due to a gap in the delivery of new speculative office schemes. In fact, with the majority of the remaining Capital Quarter office buildings now rumoured to be fully pre-let, Cardiff will have virtually no brand-new stock available in 2019.
2019 is likely to see a slow start in the occupational and investor markets, with all the uncertainty ahead of the 29 March outcome providing an opportunity to review strategies. However, regardless of the outcome of this process the re-positioning of the High Streets will continue to be a focus for retail landlords and investor strategies will still be drafted for multiple outcomes. I believe that the result is likely to be a stronger second half to the year as investors with differing views on the risk and value associated within the UK, start to action these strategies in disposing or acquiring assets accordingly.
With such a significant level of uncertainty across the UK, the Welsh Government has a huge responsibility in 2019 to assist with the attractiveness of working within Wales and in particular, our centers of commerce Cardiff, Newport and Swansea. Newly appointed Mark Drakeford, First Minister of Wales needs to consult fully with major employers, business leaders and professional bodies as the previous lack of engagement led to the 2018 introduction of Land Transaction Tax Wales which devalued real estate across the country and has seen a significant reduction in commercial property transaction volumes. Vacant Land Tax is another potential negative blow for our industry, if poorly implemented and if the opportunity to attract wealth into Wales is not taken as part of the new Income Tax powers in April 2019, it will be a significant opportunity missed.
On a very positive note, 2019 should start to see the fruits of some real City Deal investment across Wales and if major projects such as The South Wales Metro can continue to gather momentum, this will further enhance the economic benefits that should be seen from the removal of the Severn Bridge tolls…I just hope the Welsh Government’s New Year’s resolution is to sign off the M4 relief road.